Why do Charities Need Employers’ Liability Insurance?

In this guide, the Charity Insurance and Social Enterprise Insurance experts at WRS Insurance Brokers break down the key things you need to know about Employer’s Liability Insurance and what this could mean for your charity.

Employers’ Liability Insurance is a type of insurance that is legally required for all organisations – including charities – by the Health and Safety Executive (HSE) if you have paid employees (part time and full time) and employees who are on work experience. A minimum cover level of £5 million is legally required. However, at WRS, we recommend you have £10 million of cover, nearly all insurers offer this level of cover.

There are rare cases where an organisation might not need this type of insurance. One such instance is when a business is a limited company with only one employee who owns at least 50% of the business (i.e., yourself). Likewise, if you operate as a sole trader without any employees or if your only employees are family members.

The reality of workplace injuries

Employer’s Liability insurance for charities isn’t just about meeting legal requirements; it’s about safeguarding your team. Regardless of size or structure, all not-for-profit organisations with employees require Employers’ Liability insurance. The definition of an employee encompasses various roles, including full-time, part-time, temporary, and volunteer positions.

The necessity of Employers’ Liability insurance for charities becomes evident when considering the number of ways in which staff and volunteers can be exposed to risks. From slips and trips to allergic reactions or strains from lifting heavy objects, the risks can be unpredictable. Moreover, it provides financial protection by covering compensation costs if your charity is found responsible for such incidents.

Do I need Employer’s Liability Insurance for volunteers?

Volunteers are the heart of many charities, and it’s essential to ensure they’re protected just like paid employees. Most Employers’ Liability Insurance policies explicitly include volunteers under the same cover as employees. Whilst it is not obligatory for volunteers to be explicitly mentioned in policy documents, charities still bear responsibility for sickness and injuries incurred and some specialist Charity Insurance providers recommend it is good practice to include them in the policy.

Consequently, many charitable organisations opt to mitigate the risk as volunteers are often defined as employees in the eyes of the law and the HSE could potentially fine a charity if cover isn’t in place. This alignment is endorsed by the Charity Commission, emphasising the need to treat volunteers with the same care and consideration.

What will happen if I do not have Employer’s Liability cover?

Failure to have this cover can result in significant penalties, including fines of up to £2,500 per day. Additionally, not displaying a valid certificate can incur an additional £1,000 fine. Your charity must prominently display a certificate at your premises or digitally showing that a valid policy is in force and the minimum level of cover is purchased.

If you are unsure if you have the right level of cover, speak to a Charity Insurance broker or provider.

How much does Employer’s Liability for charities cost?

The cost of Employers’ Liability Insurance for charities varies depending on factors such as the size of the organisation, the extent of cover required and the activities you undertake. Consulting with insurance brokers such as WRS can provide clarity on costs and ensure comprehensive cover for all employees and volunteers.

About WRS

At WRS Insurance Brokers, we are specialists in Charity Insurance and Social Enterprise Insurance and our experienced team is passionate about the charitable sector. As a business with a strong social conscience, we’re passionate about helping support the work of organisations that make a difference. 

Our specialists have helped many charities and not-for-profit organisations achieve the peace of mind and the insurance protection they need so that they can focus their efforts on achieving their social ambitions.

WRS is proudly part of the Benefact Group, a charity-owned, international family of financial services companies that gives all available profits to charity and good causes.